CFS: More e-tailers pursue own-controlled air as a competitive advantage

LAS VEGAS — Meeting the growing demands of the market is prompting e-commerce companies to develop their own-controlled air networks. Cargo Facts Consulting estimates that 17% of all cargo shipments are related to e-commerce. According to analyst Guillermo Ochovo at Cargo Facts Symposium last week, e-commerce sales in the United States grew by 21% in 2020, and by 14% in 2021. [caption id="attachment_96946" align="alignright" width="450"] Photo courtesy of Cainiao.[/caption] “What we are estimating is that 2022 will see another year of growth. However, we may not see the high numbers we have seen in 2020 and 2021,” Ochovo said. The e-commerce industry is dominated by China-based Alibaba and JD.com, and U.S.-based Amazon; the three e-tailers collectively account for about 50% of the global gross merchandise value, Ochovo said. With that amount of merchandise moving, companies have turned to developing their own-controlled air networks. Amazon was once heavily reliant on express carriers like FedEx and UPS, then launched Amazon Air in 2015 to exclusively ship Amazon packages. The company has steadily built up its domestic and international fleet through leasing and acquisitions. In 2020, Amazon acquired a total of eleven 767-300ERs, four from WestJet and seven from Delta Air Lines. That same year, the company began handling flights out of a new hub in Leipzig, Germany. JD.com has been developing its own-controlled capacity for some time. Last year, the company ramped up its airfreight operation when it chartered a 737-300F from Zhongyuan Longhao Airlines. The freighter was the third 737-300F operating flights solely on behalf of the Chinese e-tailer, and it is the first operated by Longhao Airlines. Logistic hurdles are also a challenge to the expanding e-commerce market in Latin America, according to Ochovo. Argentina, Brazil and Mexico accounted for 75% of all e-commerce in Latin America, according to Cargo Facts Consulting. To take advantage of opportunities in the cross-border e-commerce market and develop a control logistic network, the Argentina-based Mercardo Libre launched MELI Air in 2019. Currently, the MELI fleet consists of four airplanes; two are based in Mexico Queretaro (QRO), operated by Aeronaves TSM. The carrier flies from Queretaro to the Yucatan Peninsula and to the west coast of Mexico. In Brazil, Mercado Libre is working with Sideral Linhas Aereas, which operates two 737-400Fs based in Sau Paolo (GRU) currently operating to Goiania (GYN) in central Brazil as well as Recife (REC), according to Ochovo. “Mercardo Libre is operating that fleet in Brazil and Mexico, but not operating from Brazil to a different country or from Mexico to a different country,” Ochovo said. “There are still some challengers there. We believe that it is going to take time for cross-border e-commerce to increase, and to be significant in Latin America.” Charter activity between Asia and Europe increased due to the pandemic, but now that activity is being driven by e-commerce, he added. “We believe that there is a good opportunity for long-haul capacity in this space,” Ochovo said. “We may see some changes over the next few years in these dedicated-control logistic networks, especially Alibaba and their logistics partners as well as JD.com, we may see some aircraft and some long-haul capacity in this airspace,” Ochovo said. The 2021 edition of the Global E-Commerce Logistics Outlook, produced by Cargo Facts Consulting, is now available. The Global E-Commerce Logistics Outlook is your essential resource providing an in-depth analysis of how growth in e-commerce will impact companies in the air logistics business. Learn more and get access at https://bit.ly/3w7CnKy

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